Hong Kong's New Plan

Updated Sept. 8, 1998 12:01 a.m. ET

Over this past weekend Hong Kong Monetary Authority supremo Joseph Yam announced a new plan he claims will strengthen the territory's currency board system. Mr.Yam may well have found a way to tame wild fluctuations in short-term interest rates, reducing some of the damage to the real economy from the credit crunch brought on by the Asian economic crisis and the bursting of an asset bubble. However, investors will notice that the plan also continues the trend of recent years toward creating a central bank system under which the HKMA will fine-tune the money supply. Having intervened in the stock market, a hubristic...